Earlier quoted context omitted.
That seems to be imply that she is lying, though. What if she actually doesn't know the password? For example if it isn't her laptop or the password was written down and lost or it is an old encrypted volume which she doesn't use anymore, etc.
Federal investigators and prosecutors aren't dumb. For all of those scenarios that you mentioned, it would be easy to tell whether or not this was a laptop that she used frequently. Where did she get it from? (or from whom? - she should be able to say.) In what condition was the laptop found, on her desk? opened? screen saver on? or powered down? in a pile, covered in dust? any fingerprints or other signs of use? Any…
Why doesn't the prosecutor ask banks and other parties for the records necessary to prove the accused is guilty? This is a mortgage fraud case right? Why can't they look at emails, contracts, bank records, and phone records that 3rd parties must have?
Since you can't defraud yourself, there has to be some other party involved who can turn over evidence against you.
If the prosecutor is so smart, why demand that the defendant incriminate himself? That is how the system in France works. Perhaps this prosecutor should move there.